Arthur Hayes: Tether’s Fed bet is risky, one misstep could nuke USDT

Tether's CEO has dismissed claims of insolvency, highlighting the company's $30 billion equity buffer as a significant asset that critics overlook. This response comes amid ongoing scrutiny regarding Tether's reserves and financial practices, particularly following a recent downgrade by S&P Global Ratings of its stablecoin, USDT, to the lowest score due to concerns over reserve exposure and governance issues.

Tether's CEO has publicly criticized S&P Global Ratings following the agency's downgrade of the stablecoin USDT, citing concerns over its ability to maintain its dollar peg due to its exposure to Bitcoin and gold reserves. This downgrade has raised alarms about Tether's financial stability and governance practices.

The Layer 1 blockchain Monad has recently launched, achieving an 80% surge in its native token MON, reaching an all-time high of $0.048. However, BitMEX co-founder Arthur Hayes has expressed skepticism, predicting a potential 99% crash in its value due to its perceived lack of real use cases and vulnerability as a 'VC coin'.

S&P Global has downgraded Tether's USDT stablecoin to its lowest rating, citing concerns about the stablecoin's vulnerability due to its exposure to falling Bitcoin prices and governance issues. This downgrade reflects a growing apprehension regarding Tether's financial practices and asset management.

Bolivia has made a significant move by integrating stablecoins, particularly USDT, into its banking system, allowing them to be used as legal tender. This decision aims to modernize the financial landscape and enhance economic stability in the country.

Arthur Hayes has raised concerns regarding Tether's investment strategy, particularly its significant exposure to Bitcoin and gold, which he warns could lead to substantial financial instability and undermine market confidence in the USDT stablecoin. This warning comes amid a backdrop of declining Bitcoin prices and recent downgrades from S&P Global Ratings, which cited similar vulnerabilities in Tether's financial practices.

Arthur Hayes, co-founder of BitMEX, has asserted that the cryptocurrency market is compelling traditional finance (TradFi) to evolve, particularly with the rise of equity perpetual contracts expected to dominate trading in 2026. He emphasizes that the integration of crypto into mainstream finance is no longer optional for traditional institutions.

Crypto payments firm Truther is set to launch a non-custodial USDT Visa card in El Salvador, allowing users to make transactions without preloading funds or relying on custodial services. The card will incur a 2% fee on currency conversions, with Brazilian users exempt from the IOF tax.